CHINA YYAH: Shareholders' Final Meeting Set for July 22HV DIVERSIFIED: Shareholders' Final Meeting Set for Aug. 1MA LYNX: Shareholders' Final Meeting Set for Aug. 1MA MARBLE BAR II: Shareholders' Final Meeting Set for Aug. 1MA ROTELLA: Shareholders' Final Meeting Set for Aug. 1

MARBLE BAR II FEEDER: Shareholders' Final Meeting Set for Aug. 1MSL CHARTER: Shareholders' Final Meeting Set for July 22RHYNO CBO 1997-1: Shareholders' Final Meeting Set for Aug. 1SH JASMINE I: Shareholders' Final Meeting Set for July 22WESTPORT GLOBAL: Shareholder to Hear Wind-Up Report on July 24

ARGENTINA: Refusing Talks With Elliott as Default Looms-------------------------------------------------------Katia Porzecanski and Jenna M. Dagenhart at Bloomberg News reportthat less than three weeks before Argentina risks a default,government officials still haven't met with hedge funds who won acourt ruling forbidding the country to make bond interest paymentsbefore they get $1.5 billion.

"We have not seen any indication that Argentina is serious abouteven beginning a negotiation," NML Capital, one of the holders ofbonds from Argentina's 2001 default that sued for full repayment,said in a statement July 11, according to Bloomberg News.

While representatives of NML and Argentine met separately lastweek with a court-appointed mediator in Manhattan, no directdiscussions have taken place almost a month after the U.S. SupremeCourt declined to hear Argentina's appeal in the case, BloombergNews relates. The South American country has until July 30 tomake a payment on its performing bonds, which it can't do beforesettling with NML, or default for the second time in 13 years,Bloomberg News discloses.

While an eventual deal with the so-called holdout creditors islikely, "it is hard to imagine this will happen soon," FedericoThomsen, principal at Buenos Aires-based research company E.F.Thomsen, said in an e-mailed response to questions by Bloomberg."Over the coming weeks, we will probably see markets fluctuatebetween bouts of optimism and occasional scares as frictions andobstacles become visible," Bloomberg News quoted Mr. Thomsen assaying.

Argentina saw its dollar bonds due 2033 rally last week. Pricestouched the highest in three years on speculation the nation aremaking progress on reaching a deal to resolve the case, BloombergNews notes. NML has said that it would be willing to accept acombination of cash and new bonds to settle the dispute, BloombergNews relays.

Midtown Meeting

Jay Newman and Lee Grinberg, money managers at Elliott ManagementCorp., the parent company of NML, were seen leaving mediatorDaniel Pollack's offices in midtown Manhattan on July 11 shortlyafter Argentine officials, Bloomberg News notes. While both sidespresented arguments to Mr. Pollack, they didn't do so in eachother's presence, Bloomberg News notes.

"No resolution has been reached," Bloomberg News quoted Mr.Pollack as saying. "It is my hope that there will be futuredialogue," Mr. Pollack said.

Mr. Pollack said that the legal battle stems from Argentina'srecord $95 billion default in 2001, Bloomberg News relates. Thenation restructured about 92 percent of the debt in 2005 and 2010by imposing discounts of about 70 percent, Bloomberg News relays.Creditors including Elliott shunned the debt swaps to seek betterterms through litigation.

No Default

The U.S. Supreme Court on June 16 left intact the decision thatbars Argentina from paying restructured debt unless holders ofdefaulted bonds are paid in full, Bloomberg News discloses. AU.S. judge blocked a $539 million interest payment on June 27.

The country's negotiations with bondholders will succeed, MarioBlejer, vice president of Banco Hipotecario and a former presidentof the Argentine central bank, said in an interview with BloombergTV. Mr. Beljer said he was "absolutely certain" there will be notechnical default.

Argentine officials told the mediator that a delay on the ordersis necessary for talks, Bloomberg News relays. A settlement riskstriggering as much as $15 billion in additional claims from otherbondholders, Economy Minister Axel Kicillof has said, BloombergNews notes.

"Argentina is open to continuing a dialogue that allows it toreach a solution in fair, equal, and legal conditions for 100percent of bondholders," the Economy Ministry said in a statementreleased after the talks, Bloomberg News adds.

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BES INVESTIMENTO: Moody's Lowers Sr. Debt & Deposit Ratings to B1-----------------------------------------------------------------Moody's Investors Service downgraded BES Investimento do BrasilS.A. 's ("BESI") ratings, including the bank financial strengthrating (BFSR) to E+ from D-, which now maps to a baseline creditassessment of b1 from ba3; the long-term global local and foreigncurrency deposit ratings to B1 from Ba3; and the long- and short-term Brazilian national scale deposit rating to Baa2.br fromA2.br, and to BR-3 from BR-2, respectively. In addition, Moody'saffirmed the short-term global local and foreign currency depositratings of Not Prime. Moody's has also placed all ratings onreview for further downgrade, with the exception of the Not Primeshort-term debt and deposit ratings.

The following ratings assigned to BES Investimento do Brasil S.A.were downgraded, and placed on review for downgrade:

The downgrade of BESI's standalone financial strength rating to E+from D-, and the lowering of its baseline credit assessment to b1from ba3, reflect the ratings downgrade of its parent bank, BancoEspirito Santo (BES), on concerns regarding BES'screditworthiness. Please refer to "Moody's downgrades BancoEspirito Santo's debt ratings to B3, deposit ratings to B2;ratings remain on review for downgrade" published July 11th, 2014.

The rating action incorporates the uncertainty around the parentbank's financial strength that could negatively affect BESI'sliquidity position and access to funding. Further, BESI'sprofitability could also suffer were its cost of funding to riseor its core investment banking deal flow be affected by recentdevelopments at the parent.

Moody's observes that BESI has maintained a meaningful liquiditycushion over the course of this year, which has been enhanced bythe issuance of BRL 200 million in domestic debt (LetrasFinanceiras) in mid-June 2014. The buildup of the bank's liquiditycushion also targets the repayment of BESI's outstanding $500million cross border bond, which matures in 1Q15.

BESI's standalone credit assessment, which is now multiple notcheshigher than its parent's, also incorporates the subsidiary'saccess to funding and liquidity independently from the parent, aswell as earnings generation capacity, which derives from thesubsidiary's own domestic franchise. Furthermore, localregulations preclude BESI from engaging in related-partyactivities, and therefore, limit direct interconnection with itsparent's risk.

The review for downgrade of BESI's ratings will focus on thepotential effects that the uncertainty around its parentcreditworthiness could have on BESI Brazil's ability to accessfunding, and therefore, to sustain an adequate liquidity profile.Also, the review will monitor any increased pressure onprofitability, particularly through higher cost of funds.

The B1 global local currency deposit rating derives from BESI'sstandalone baseline credit assessment of b1, and does not benefitfrom any parental nor systemic support uplift.

The last rating action on BESI was on 28 April 2014, when Moody'saffirmed all ratings assigned to BES Investimento do Brasil S.A.("BESI"), including the D- financial strength rating (BFSR), whichmaps to a ba3 baseline credit assessment in the global ratingscale; the Ba3 and Not Prime long- and short-term global local andforeign currency deposit ratings; and the A2.br and BR-2 long- andshort-term national scale deposit ratings on the Braziliannational scale. The outlook on all ratings was changed to stablefrom negative.

The principal methodology used in this rating was Global Bankspublished in May 2013.

Moody's National Scale Credit Ratings (NSRs) are intended asrelative measures of creditworthiness among debt issues andissuers within a country, enabling market participants to betterdifferentiate relative risks. NSRs differ from Moody's globalscale credit ratings in that they are not globally comparable withthe full universe of Moody's rated entities, but only with NSRsfor other rated debt issues and issuers within the same country.NSRs are designated by a ".nn" country modifier signifying therelevant country, as in ".mx" for Mexico. For further informationon Moody's approach to national scale credit ratings, please referto Moody's Credit rating Methodology published in June 2014entitled "Mapping Moody's National Scale Ratings to Global ScaleRatings".

BES Investimento do Brasil S.A. is headquartered in Sao Paulo,Brazil and reported total assets of BRL8.1 billion ($3.5 billion)and equity of BRL665.7 million ($284.2 million) as of 31 December2013.

BES INVESTIMENTO: Moody's Lowers Senior Unsec. Debt Rating to B1----------------------------------------------------------------Moody's America Latina Ltda. has downgraded BES Investimento doBrasil S.A.'s (BESI) senior unsecured local currency debt ratingto B1 from Ba3, and the National Scale debt rating to Baa2.br fromA2.br. At the same time, Moody's has also placed the debt ratingson review for downgrade.

The following ratings assigned to BES Investimento do Brasil S.A.were downgraded, and placed on review for downgrade:

Long-term local currency senior unsecured debt rating to B1, fromBa3

Long-term national scale debt rating to Baa2.br, from A2.br

Ratings Rationale

The downgrade of BESI's senior unsecured local currency debtrating to B1 from Ba3 derives from the downgrade of BESI'sstandalone financial strength rating to E+ from D-, and thelowering of its baseline credit assessment to b1 from ba3, which,in turn, reflect the ratings downgrade of its parent bank, BancoEspirito Santo (BES), on concerns regarding BES'screditworthiness. Please refer to "Moody's downgrades BancoEspirito Santo's debt ratings to B3, deposit ratings to B2;ratings remain on review for downgrade" published by Moody'sInvestors Service on July 11th, 2014.

The rating action incorporates the uncertainty around the parentbank's financial strength that could negatively affect BESI'sliquidity position and access to funding. Further, BESI'sprofitability could also suffer were its cost of funding to riseor its core investment banking deal flow be affected by recentdevelopments at the parent.

Moody's observes that BESI has maintained a meaningful liquiditycushion over the course of this year, which has been enhanced bythe issuance of BRL 200 million in domestic debt (LetrasFinanceiras) in mid-June 2014. The buildup of the bank's liquiditycushion also targets the repayment of BESI's outstanding $500million cross border bond, which matures in 1Q15.

BESI's standalone credit assessment, which is now multiple notcheshigher than its parent's, also incorporates the subsidiary'saccess to funding and liquidity independently from the parent, aswell as earnings generation capacity, which derives from thesubsidiary's own domestic franchise. Furthermore, localregulations precludes BESI from engaging in related-partyactivities, and therefore limits the direct interconnection withits parent risk.

The review for downgrade of BESI's ratings will focus on thepotential effects that the uncertainty around its parentcreditworthiness could have on BESI Brazil's ability to accessfunding, and therefore, to sustain an adequate liquidity profile.Also, the review will monitor any increased pressure onprofitability, particularly through higher cost of funds.

The last rating action on BESI was on 29 April 2014, when Moody'sassigned a Ba3 senior unsecured debt rating and A2.br NationalScale debt rating to BES Investimento do Brasil S.A.'s (BESI)proposed senior unsecured debt under the program of "LetrasFinanceiras".

The principal methodology used in this rating was Global Bankspublished in May 2013.

Moody's National Scale Credit Ratings (NSRs) are intended asrelative measures of creditworthiness among debt issues andissuers within a country, enabling market participants to betterdifferentiate relative risks. NSRs differ from Moody's globalscale credit ratings in that they are not globally comparable withthe full universe of Moody's rated entities, but only with NSRsfor other rated debt issues and issuers within the same country.NSRs are designated by a ".nn" country modifier signifying therelevant country, as in ".mx" for Mexico. For further informationon Moody's approach to national scale credit ratings, please referto Moody's Credit rating Methodology published in June 2014entitled "Mapping Moody's National Scale Ratings to Global ScaleRatings".

BES Investimento do Brasil S.A. is headquartered in Sao Paulo,Brazil and reported total assets of BRL8.1 billion ($3.5 billion)and equity of BRL665.7 million ($284.2 million) as of 31 December2013.

CSN is one of two of the largest flat steel producers in Brazil,with a solid domestic position. Its market share in products suchas tinplate and galvanized steel in Brazil is 87% and 37%. CSN'sBrazilian market position resulted in a 20% EBITDA margin from itssteel division, which compares well with most of its global peers.The company's solid position within the Brazilian steel industryis complemented by its seaborne iron business. CSN exported 21.5million tons of iron ore (which includes 60% of Namisa) during2013, nearly 80% of which went to Asia. The company continues toseek to expand its iron or export business. CSN is targetinggrowth in exports that if successful would lead to a significantincrease in exports by 2017. Fitch's base case anticipates exportsof approximately 40 million tons during 2017. If CSN's issuccessful in enhancing its iron ore output, the company'sprofitability will improve dramatically. Iron ore accounted forabout 49% of the company's BRL5.4 billion of EBITDA during 2013.

Growing Leverage Projected

CSN's net debt/EBITDA ratio rebounded to 3.1x for the LTM endedMarch 31, 2014 from 3.8x in 2012. The company benefited fromimport restrictions on steel in Brazil, as well as a slightimprovement in iron ore prices and a growth in volumes. Combined,these factors led to an improvement in the company's EBITDA toBRL5.4 billion from BRL4.5 billion. Fitch projects CSN's netleverage will stay relatively flat during 2014 as higher volumesare being offset by declining iron ore prices. The company isexpected to end 2014 with an FFO adjusted net leverage ratio ofapproximately 3.8x and a FFO fixed-charge coverage ratio ofapproximately 2.5x. During 2015 and 2016, the company's netdebt/EBITDA ratio should climb to around 3.5x from 3.1x, while itsFFO adjusted net leverage ratio should slightly exceed 4.0x. Thegrowth in these ratios is due to Fitch's projection of a declinein iron ore prices to $90 per ton in 2015 and 2016 in its models,as well as heavy capex by CSN on the growth of its iron ore mines.

Solid Liquidity Position despite Negative Free Cash Flow

CSN has low refinancing risk. As of March 31, 2014 CSN held overBRL10 billion in cash and marketable securities. During the next12 months CSN faces BRL3.4 billion of debt amortizations. CSN hasgenerated consistent negative free cash flow over the years due toheavy investments into its Iron Ore and Steel divisions and highdividend payments. The company generated negative free cash flowof BRL1.1 billion for LTM March 31, 2014 and BRL1.9 billion for2013. Fitch's base case indicates negative FCF generation of morethan BRL 1 billion in both 2014 and 2015 as CSN continues toinvest in its iron ore operations.

Strong Pricing to Continue in 2014

The flood of steel imports into Brazil declined during 2013 withvolumes of 1.9 million metric tons indicating a 43% reduction from3.4 million metric tons of steel that were imported during 2012.Historically, the normalized level has been 2 million tons, whilethe peak volume for imported steel was 5.6 million metric tons in2010. The large reduction in 2013 was aided by the continueddevaluation of the Brazilian Real and steel tariffs of 12% imposedby the government, that at one point last year was doubled to 24%temporarily on specific steel products. In 2014, the tariffs areexpected to remain in place. Fitch projects this will foster amodest growth in EBITDA to around BRL5.6 billion. A key componentof Fitch's forecast is the conservative assumption that iron oreprices will average $100 per ton in 2014.

Rating Sensitivities

Fitch could downgrade CSN's ratings if its credit metrics and cashflow generation soften and the company continues to develop itsprojects at a pace that will result in its net adjusteddebt/EBITDA climbing to higher than 3.5x and/or its FFO adjustednet leverage ratio exceeding 4.0x during 2014 and 2015, two yearsin which capex should exceed BRL2.0 billion per year. A downgradecould also follow deterioration in the company's comfortableliquidity position.

A ratings upgrade is unlikely in 2014 or 2015. A change in theRating Outlook to Stable could occur if the company brings on ironore capacity as scheduled and within budget. An upgrade in thelonger term would be contingent upon a reduction in the company'snet adjusted debt/EBITDA ratio to around 2.0x when iron ore pricesare in the range of $90 per ton. An increase in the company's ironore exports to more than 50 million tons would also be viewedpositively.

According to a securities filing, OSX Brasil sought protection forits OSX WHP 1&2 Leasing BV unit after an unnamed "allegedcreditor" asked a court to order payment in a way that threatenedOSX's obligations to other creditors, Reuters relates.

OSX WHP was created to finance the building of two fixed, offshoreoil-production platforms for bankrupt sister oil company Oleo eGas Participacoes SA, according to Reuters. The decision does notaffect Netherlands-based OSX units that own the company's threeoil production ships, which are known as FPSOs, the report notes.

OSX filed for bankruptcy in a Rio de Janeiro court in November,less than two weeks after Oleo e Gas filed Latin America'slargest-ever bankruptcy-protection petition. OSX depends on Oleoe Gas, formerly known as OGX Petroleo e Gas Participacoes, fornearly all its revenue, the report discloses.

On June 3, Oleo e Gas creditors, including OSX, agreed to a planto restructure nearly BRL12 billion ($5.4 billion) of unpaidobligations in an operation expected to be complete by October,Reuters relates.

OSX's November bankruptcy filing in Brazil did not include itsoverseas subsidiaries such as OSX WHP or similar investmentvehicles that own the company's FPSOs, two of which are leased toOleo e Gas, Reuters adds.

OSX had outstanding debts of around US$2.2 billion as of June 30,2013, including dollar-and real-denominated loans and bonds heldby a mix of banks, investors and government institutions, such asBrazil's Merchant Marine Fund, according to The Wall StreetJournal.

The move on Nov. 11 at a Rio de Janeiro court follows a defaultand bankruptcy filing the prior month for Mr. Batista's flagshipoil firm OGX Petroleo e Gas Participacoes SA, n/k/a Oleo e Gas,according to the WSJ report. The firm went public in 2008 for$4.1 billion but failed to produce nearly any of the up to 10.8billion barrels it claimed to have.

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CHINA YYAH: Shareholders' Final Meeting Set for July 22-------------------------------------------------------The shareholders of China YYAH Ltd. will hold their final meetingon July 22, 2014, at 10:00 a.m., to receive the liquidator'sreport on the company's wind-up proceedings and property disposal.

HV DIVERSIFIED: Shareholders' Final Meeting Set for Aug. 1----------------------------------------------------------The shareholders of HV Diversified Strategies Limited will holdtheir final meeting on Aug. 1, 2014, to receive the liquidator'sreport on the company's wind-up proceedings and property disposal.

MA LYNX: Shareholders' Final Meeting Set for Aug. 1---------------------------------------------------The shareholders of MA Lynx Limited will hold their final meetingon Aug. 1, 2014, to receive the liquidator's report on thecompany's wind-up proceedings and property disposal.

MA ROTELLA: Shareholders' Final Meeting Set for Aug. 1------------------------------------------------------The shareholders of MA Rotella Limited will hold their finalmeeting on Aug. 1, 2014, to receive the liquidator's report on thecompany's wind-up proceedings and property disposal.

MSL CHARTER: Shareholders' Final Meeting Set for July 22--------------------------------------------------------The shareholders of MSL Charter Corp will hold their final meetingon July 22, 2014, at 1:00 p.m., to receive the liquidator's reporton the company's wind-up proceedings and property disposal.

SH JASMINE I: Shareholders' Final Meeting Set for July 22---------------------------------------------------------The shareholders of SH Jasmine I Limited will hold their finalmeeting on July 22, 2014, at 10:00 a.m., to receive theliquidator's report on the company's wind-up proceedings andproperty disposal.

* DOMINICAN REPUBLIC: Says Haiti Must Lift Ban on Products Now--------------------------------------------------------------Dominican Today reports that Dominican Republic called on Haiti toimmediately repeal its ban on the import of Dominican products,during a high-level meeting with officials from both countries.

Presidency Chief of Staff Gustavo Montalvo made the request in aspeech in the presence of Haiti Prime Minister Laurent Lamothe,during the meeting in the resort town near San Pedro (east),according to Dominican Today.

The report relates that Mr. Montalvo said the Dominican Governmenttakes all the necessary steps to cooperate with and formalizetrade between the Hispaniola countries. "In the relations betweenfriendly countries, physical barriers to trade should not exist,except for very exceptional reasons such as national security,"the report relates.

Mr. Montalvo said the current ban have only led to an increase ofinformal trade and created competitive disadvantages, the reportrelays.

Mr. Montalvo said there's evidence that products banned fromcrossing the border are allowed entry through Haiti's ports, thereport notes. "We feel that there's no reason to treat the borderdifferently from the ports," the report quoted Mr. Montalvo assaying.

The official added that it's difficult to have such disparagingtariffs on similar goods along a common border, with 0% on oneside, and as high as 40% on the other, the report relates. "Wepropose the creation of a trade table in which we both nations sitdown to take the necessary measures to achieve this adaptation,"Mr. Montalvo said, the report adds.

=============J A M A I C A=============

* JAMAICA: Hurricane Sandy Disrupts Growth Projections------------------------------------------------------RJR News reports that the International Monetary Fund (IMF) hasdeclared that the model currently being used to predict Jamaica'seconomic growth has not been giving accurate outcomes.

The Fund, in its latest report on Jamaica, said the problem hadarisen largely because of the effects of Hurricane Sandy,according to RJR News. The Hurricane, which hit Jamaica inOctober 2012, led to major economic disruptions, particularly inagriculture and mining, the report relates.

The multi-lateral agency revealed that the economic growthindicator over projected growth in the aftermath of the hurricaneand under projected the rebound, which occurred at the end of lastyear, the report notes.

It said the model had predicted zero per cent growth for the endof December, but the actual out turn was 1.8 per cent, the reportrelates.

It suggested that there may be a number of reasons for the failureto accurately predict growth, including the implementation of theIMF program and the ongoing depreciation of the currency, adds thereport.

=======P E R U=======

BANCO DE LA NACION: Fitch Ups Viability Rating From 'bb+'---------------------------------------------------------Fitch Ratings has affirmed Peru's Banco de la Nacion's (BN)support-driven foreign currency long-term Issuer Default Rating(IDR) at 'BBB+,' local currency long-term IDR at 'A-', foreigncurrency short-term IDR at 'F2' and its Support Rating Floor at'BBB+'. In addition, Fitch has upgraded Banco de la Nacion'sViability Rating (VR) to 'bbb-' from 'bb+.' The Rating Outlook isStable. A full list of rating actions is at the end of this ratingaction commentary.

The VR has been upgraded in light of Banco de la Nacion's strongand stable profitability, underpinned by ample margins, as well asits exceptional asset quality, high levels of liquidity and accessto stable, low cost funding.

Key Rating Drivers - IDRS, SRF and VR

The bank's IDRs, reflect the potential support from Banco de laNacion's shareholder, the Republic of Peru ('BBB+/A-'/OutlookStable). Banco de la Nacion is an autonomous government agency andin Fitch's opinion, forms an integral part of the government'soperations.

It performs basic government functions (collections and payments),acts as the government's financial agent, finances key governmentactivities (e.g. defence procurement and infrastructure), andmaintains the country's most extensive branch network throughwhich it provides financial services in remote areas where privatebanks are not present. Therefore, support from the governmentshould be forthcoming, if needed. By the same token, Banco de laNacion's support rating and support rating floor, indicate thedirect link between the entity's creditworthiness and that of itsshareholder, the Republic of Peru.

The bank's VR has been upgraded in light of the positive operatingenvironment, the bank's healthy asset quality, its stableprofitability and adequate capital base. BN's performance issupported by the strength of the Peruvian operating environment,including a dynamic economy, strong macroeconomic fundamentals,low inflation, a healthy fiscal position and a capable bankingregulator. Fitch forecasts real GDP growth in Peru of 5.2% and5.6% for 2014 and 2015, respectively.

BN's asset quality ratios are considerably healthier than thePeruvian banking sector average and its international peers. BN'srisk profile is relatively low, as lending is directed primarilyto national and subnational governments, public agencies, publicservants and government retirees. Past due loans (PDLs) accountedfor a low 0.41% of gross loans and reserve coverage rose to555.89% at the first quarter of 2014 (1Q'14).

In addition, despite downward pressure on interest rates, BN'sprofitability has remained relatively stable and strong. BNreported ROAA of 2.94% at 1Q'14 (2.92% at fiscal year-end 2012[FYE12]). Profitability continues to be driven by asset growth andample albeit narrowing margins, and growing non-interest revenues.BN's profitability is expected to remain robust in the near termdue to its cost of funds and scope to grow its loan portfolio fromexisting liquidity.

Fitch Core Capital remains solid but has declined to 29.1% ofrisk-weighted assets at FYE13 from 38.5% at FYE12 mainly due tothe bank's steady expansion and high dividend distribution.Capital ratios at 1Q'14 are expected to partially recover byFYE14, as dividends based on prior year earnings were paid earlyin the year. BN continues to benefit from the low-risk weight ofits assets (45.01% in cash and 22.31% in government securities atFYE13). Regulatory capital remains at 15.4% of risk weightedassets at 1Q'14, significantly higher than the 10% regulatoryrequirement.

A continuing constraint on the bank's VR is its exposure topotential political influence, given its ownership and role.Government influence manifests itself primarily in the appointmentof directors. Although current directors are highly qualified,currently there are no eligibility standards in place for serviceon the board.

Rating Sensitivities - IDRS, National Ratings And Senior Debt

As a fully state-owned financial institution, deeply integratedwithin the government, Banco de la Nacion's creditworthiness andratings are directly linked to those of the Republic of Peru.Hence, its ratings should move in line with any potential changein Peru's sovereign ratings.

Rating Sensitivities - VR

BN's VR could be pressured by a change in risk appetite, includingan expansion into new business segments in which the bank haslittle underwriting experience or an engagement in activities withincreased market risk. Similarly, BN's VR is also sensitive to asustained decline in tangible equity below 5% of tangible assets,particularly if such decline resulted from a deterioration ofprofitability or asset quality.

Conversely, greater protections against political influence, suchas stricter eligibility criteria for Directors, would be positivefor BN's VR. However, given the bank's narrow business model andlimited scope for franchise development, Fitch sees limited upsidepotential in its viability rating.

BanBif's local and foreign currency IDRs are driven by its VR of'bbb-', which reflects its solid asset quality, consistentperformance, as well as an improving funding and liquidityprofile. The ratings also factor in its moderate capitalizationand franchise.

Reasonable and stable interest margins and sustainable generationof non-interest revenues supported BanBif's consistent performance(operating ROAs above 2.0% in the last 3 years). Nevertheless,relatively high funding costs and operating expenses related tothe bank's expansion continue to weigh on profitability. BanBif'soperating profitability remained stable in the first months of2014. Positively, due to good asset quality, the bank's loan lossprovisions remain under control.

BanBif has a relatively diversified funding structure, although itis reliant on deposits (74% of the total funding at March 2014),in where the proportion of individuals has significantly increasedsince 2011 given the expansion strategy followed by the bank. Asof March 2014, deposits from individual represented 36% of totaldeposits, in contrast with 30% two years ago. BanBif continues toshow maturity mismatches within its balance sheet due to arelatively long-term credit portfolio; however this has beenmanaged by increasing its long-term funding through credit linesand local bond issuances.

Fitch views BanBif's capitalization as moderate in light of itsaccelerated growth. BanBif's capital position has remained stableover the past years, driven by the consistent earnings retention.BanBif's Fitch Core capital (FCC) to risk-weighted assets (RWA)ratio has remained around 8%, although relatively low to itsinternational peers. BanBif's capital ratios may continue to besupported by its good profitability and prudent dividend pay-outratio.

BanBif is a medium-sized universal bank that has grown to bePeru's fifth largest bank, with a markets share of approximately3.4% of total loans and 3.0% of total deposits. BanBif's strategyfocuses in diversifying its business portfolio in small and mediumenterprises (SMEs) and retail products, mainly to B and C segmentswithout neglecting its core target market, corporates.

Support Rating And SRF

BanBif's Support Rating of '4' and Support Rating Floor of 'BB-'indicate its systemic importance for the Peruvian banking system.Being the fifth largest Peruvian bank, Fitch believes that therewould be a limited propensity for support from the government,should it be required.

Rating Sensitivities

VR AND IDRs

A sustained performance that strengthens BanBif's FCC to RWAmetrics consistently above 10% could benefit the bank's VR andIDRs. A more diversified low-cost funding mix and sustainedimprovements in efficiency levels could also benefit the bank'sratings.

On the other hand, a constant increase of BanBif's risk appetitethat erodes its profitability and drives FCC to RWA consistentlybelow 8% could pressure ratings downward.

Support Rating And SRF

Upside potential for the SR and SRF is limited and can only occurover time with a material growth of the bank's systemicimportance. These ratings could be downgraded if the bank losesmaterial market share in terms of loans and customer deposits.

The Negative Outlook is the result of a deterioration inCoazucar's EBITDA margin due to a structural change in the pricingpremium enjoyed by Peruvian sugar companies in response to a surgein imported sugar. This change was responsible for about 50% ofthe decline in the company's EBITDA to USD99 million in 2013 fromUSD186 million in 2012. Price declines occurring at a faster pacethan the drop in international prices for sugar will pressure thecompany's operating cash flow while the company is in the midst ofaround USD200 million of capex planned for the next two to threeyears, mainly for the Olmos Project. Beginning in November 2014,the company will also need to make annual payments of around USD9million for water resources for the Olmos Project due to take-or-pay contracts, even though this project will not becomeoperational until the middle of 2016.

The ratings reflect Coazucar's strong business position as thelargest sugar producer in Peru. The company has a low coststructure and high operating margins due to the proximity of itsoperations to the sugar cane fields, its low dependence on third-party cane producers, and some of the world's highest sugar caneyields per hectare as a result of its favorable geographiclocation that allows for a continued growing period. Coazucar'sratings benefit from its shareholders, which have large andprofitable investments in the dairy and cement industries withinPeru. Fitch believes these shareholders could provide liquidityand support if needed. Balanced against these strengths is thevolatility of earnings associated with the sugar industry, thecompany's exposure to currency exchange fluctuations, and eventrisk associated with the natural phenomenon, El Nino.

EBITDA and Margins Deterioration

Coazucar's EBITDA for the LTM ended March 31, 2014 was USD90million. This compares unfavorably to the USD186 million in 2012.During these time periods, the company's EBITDA margin declined to19% from 33%. About 50% of the downturn was due to the 3 cent and4 cent decline in international prices for brown and white sugar,respectively, which is typical with a cyclical industry and wasincorporated in the rating. The balance was primarily a result ofa sharp decline in the spread for local prices versusinternational prices. Unfavorable weather conditions in Argentinaand a strike in the company's lower margin business in Ecuadoralso contributed to a decline in EBITDA and margins. Fitch doesnot expect Coazucar to recover its historical EBITDA margins ofaround 40%. If sugar prices remain at depressed levels, thecompany's margins should improve slightly from the startup of itsnew refinery, which will result in an increase in the productionof white refined sugar. During 2013, about 45% of the company'ssugar sales were from white sugar. Lower margin brown sugar salesaccounted for around 50% of sales. This ratio should reversefollowing the completion of the new refinery.

Increased Leverage

As of March 31, 2014, Coazucar had USD500 million of totaladjusted debt and USD65 million of cash and marketable securities.This level of debt, in relation to USD90 million of EBITDA,resulted in a total leverage ratio of 5.6x for the LTM March 2014and a net debt ratio of 4.8x. The net leverage ratio comparesunfavorably against the 2.0x at the end of 2012. During 2013, thecompany spent USD73 million on capex, which contributed tonegative free cash flow (FCF) of USD49 million. FCF is expected tobe negative/neutral in 2014. Coazucar's leverage and FCF in thenext few years would depend on recovery in prices and the amountof capex involved in the Olmos Project developments.

Weak Liquidity

Coazucar's amortization schedule is weak, despite most of its debtbeing associated with its USD325 million note due in 2022. As ofMarch 31, 2014, the company had USD65 million in cash whichcovered adjusted short-term debt of USD54 million by only 1.2x.

Strong Equity Holder

Fitch views as positive the fact that the company is part of aconglomerate of companies owned by the Rodriguez Banda Family(50/50% by the two brothers) which has a tangible presence andlong tradition of operations in Peru and the region. Theconglomerate has leading business positions in every sector inwhich it participates. Fitch factors into its rating the potentialsupport from the shareholder to Coazucar and believes that cashwill be injected into the company if its liquidity deterioratesfurther.

Rating Sensitivities

A negative rating action could occur in case of furtherdeterioration in the group's liquidity position due to increasedcapital investment or lower margin without any tangible supportfrom its shareholder. A downgrade could occur if Coazucar's netleverage exceeds 3.5x consistently during mid-cycle sugar prices.

An Outlook revision to Stable could occur if Coazucar improves itspricing power, reduces leverage and improves cash flow through theinvestment cycle. Tangible support from the shareholder thatimproves liquidity and lowers leverage could also lead to positiverating actions.

"The rating affirmation follows our view that Lindley's key creditmetrics continue to be in line with its "significant" financialrisk profile despite lower-than-anticipated volume and revenuegrowth in 2013 and during the first few months of 2014," saidStandard & Poor's credit analyst Laura Martinez.

Lower volumes and revenues growth reflect difficult weatherconditions and weaker consumer spending, which has hit the foodand beverage industry in Peru, amid stronger competition. S&Pexpects Lindley will remain focused on reaching operatingefficiencies and improving its distribution system whilecompleting its capital investments this year, which should allowthe company to improve its profitability and strengthen its creditmetrics in the next two years.

The CreditWatch placement largely reflects S&P's recent downgradesof Puerto Rico Electric Power Authority (PREPA), the Commonwealthof Puerto Rico, and the Government Development Bank for PuertoRico. All these rating actions are associated with the passage oflegislation allowing certain Puerto Rican public entities,including PREPA, to restructure their debt obligations. "We thinkthe passage of this legislation increases the risk that one ormore of such public entities may choose to restructure their debtand, as a result, OFG could be subject to material losses relatedto certain of these exposures," said Standard & Poor's creditanalyst Robert Hansen. "Despite a notable decline in recentquarters, we think Oriental Bank still has very substantial loanand securities exposures to the Commonwealth of Puerto Rico,instrumentalities, and municipalities, which we view veryunfavorably from a geographic risk concentration perspective."

Specifically, the company's loan and securities exposures to theCommonwealth of Puerto Rico, instrumentalities, and municipalitiesdeclined to roughly $761 million as of March 31, 2014, from nearly$1 billion as of Sept. 30, 2013. Despite the decline, S&P stillviews these exposures as very large relative to the size of thecompany's capital base. These exposures exceed the company'stotal adjusted capital (TAC), which was $712 million as ofMarch 31, 2014, by S&P's calculation. S&P expects the bank toremain profitable but think further improvements in loanperformance will be difficult over the next two years given thestill-weak economy in Puerto Rico.

S&P thinks management turnover has increased modestly, which itviews somewhat negatively. For example, effective July 3, theemployment of Norberto Gonzalezas executive vice president andchief risk officer ended, and on July 9, OFG appointed Cesar Ortizsenior vice president and chief risk officer and Maritza Arizmendisenior vice president of corporate finance and chief accountingofficer. Nonetheless, these two newly appointed executives havesubstantial experience in the industry and with the company, inour opinion.

S&P could lower the rating on OFG Bancorp and Oriental Bank ifcertain instrumentalities, particularly PREPA, or municipalitiesmiss debt or interest payments or restructure their debtobligations resulting in material losses for OFG. S&P could alsolower its rating if it expects loan performance to weakenmaterially, if S&P no longer views capital as strong, or if S&Pagain lower its rating on the Commonwealth of Puerto Rico. S&Pexpects to address or resolve the CreditWatch within the next 60-90 days.

The negative outlook affects PRASA's series 2008A and 2008Brevenue bonds, of which $285 million are outstanding.

"We have also lowered PRASA's stand-alone credit profile (SACP) to'bb-', from 'bb+'. The SACP reflects our view of the authority'sgeneral creditworthiness based solely on its own fundamentals,absent any uplift or headwinds associated with its relationshipwith the general government. The lower SACP is because we viewthe current climate surrounding all Puerto Rico obligations ascreating adverse business conditions for PRASA. Its liquidity hasno immediate challenges because of a 2012 bond restructuring thatincluded the injection of temporary working capital, as well as a60% rate increase in 2013. However, we view the authority'sability to extend its lines of credit (LOCs; expiring in March2015) or convert them to long-term debt as now being moredifficult. PRASA has little discretion in its capital improvementprogram given the large share of regulatory-ordered, date-certainmandates as a share of total projects. Although an SACP does notcarry an outlook, the outlook on the revenue bonds is negativebecause we believe there is at least a one-in-three chance thatthe adverse business conditions could worsen for the authoritywithin our two-year outlook horizon," S&P said.

PRASA is the sole water and sewer service provider in Puerto Rico,serving approximately 1.25 million customers. The system consistsof a relatively fragmented series of water and wastewaterfacilities divided into five regional service areas. Theprimarily residential base has seen little customer growth, giventhe island's economic profile and population trend. Due to thesystem's noncontiguous nature and condition, the authority has avery high level of nonrevenue water (slightly less than 60% oftotal water produced) as well as multiple regulatory violations.Steps to remediate these problems include large-scale meterreplacements, more aggressive collections, staffing reductions,and aggressive efforts to reduce energy demand.

The negative outlook on the Puerto Rico-backed bond reflectsStandard & Poor's outlook on its GO debt. The negative outlook onPRASA's gross-lien revenue bond reflects S&P's view that theclimate surrounding all commonwealth obligations is furthering theadverse business conditions in which the authority is operating.A further downgrade to Puerto Rico's GO debt would lead to adowngrade on the guaranteed revenue bonds. An outlook revision tostable would be mainly predicated on what S&P views as unimpeded,apolitical access to working capital sufficient in nature tosupport ongoing operations and address the highest prioritycapital projects.

PUERTO RICO: Makes Bond Payments, But Muni Market Remains on Edge-----------------------------------------------------------------Lisa Lambert, writing for Reuters, reported that creditors toPuerto Rico's electricity provider were given a slight respitewhen the bonds' trustee made a scheduled payment, but the U.S.municipal bond market remained worried the Puerto Rico ElectricPower Authority (PREPA) will soon use a new bankruptcy-likeprocess to restructure its debts. According to the report, thelaw establishing the process has rattled the $3.7 trillionmunicipal market since it was passed and has prompted Moody'sInvestors Service to push ratings on Puerto Rico debt deeper intojunk territory.

Trinidad and Tobago's economy is embarking on a sustainable growthpath. Maintenance-related slowdowns in the energy sector areending, while non-energy growth is robust, with economic slackbeing used up. Headline inflation is trending down (in part forstatistical reasons), while core inflation remains contained atabout 2-3 percent. The unemployment rate has fallen to only 3 3/4percent, although this masks sizable underemployment in government"make-work" programs.

The fiscal balance is likely to improve in fiscal year 2013/14,with the deficit falling to only 1 1/2 percent of GDP, but largelyfor ad hoc reasons rather than durable improvements in revenues orexpenditures. The external current account surplus has reboundedto over 10 percent of GDP and reserves are at 12 months ofimports. However, the foreign exchange allocation system,although it had generally worked well for several years, led tofairly widespread and persistent foreign exchange shortages, assupply and demand imbalances grew from late 2013. A recent seriesof actions by the central bank has improved the supply of foreignexchange to the market.

The time is drawing near for policy tightening. The main externalrisk is from a sustained decline in energy prices. The domesticmedium-term challenges are to boost long-run growth throughstructural reforms and reorienting fiscal policy, with measures tosave more of the nation's nonrenewable energy wealth, and limitingcurrent expenditures while increasing growth-enhancing capitalspending. Such policies would likely pose near-term headwinds,but enhance competitiveness and boost potential growth in the non-energy sector. However, significant reforms are likely to bedelayed by the electoral calendar. A greater degree of flexibilityis needed in the foreign exchange system to avoid furthershortages.

Executive Board Assessment

Executive Directors welcomed the improved growth outlook, andnoted the strong external position and limited fiscalvulnerabilities. They agreed, however, that the reduction ineconomic slack and the need for a durable consolidation of thefiscal position suggest that a tightening of macroeconomicpolicies may be necessary in the near future. Over the mediumterm, Trinidad and Tobago remains vulnerable to a decline inenergy prices, which calls for structural reforms to diversify theeconomy and improve its growth potential.

Directors concurred that the authorities should stand ready tostart tightening monetary policy in view of the reduced labormarket slack and high consumer credit growth, and to prepare forthe spillovers from the normalization of monetary policy in theUnited States. Implementing this tightening, however, could becomplicated by banks' excess liquidity and the weak monetarytransmission mechanism. Against this background, Directorsconcurred that tighter prudential regulations could be considered.Directors welcomed recent measures to improve the budget outturnfor the current fiscal year. They underscored the importance ofmoving toward fiscal surpluses as soon as feasible, using moredurable improvements in revenues and expenditures, in order tomake better use of the country's nonrenewable energy endowment.Spending should be reoriented away from current expenditure towardgrowth-enhancing capital projects, including by better targetingsocial benefits and reducing energy subsidies. Broadening thenon-energy tax base remains key to strengthening revenues.

Executive Directors welcomed continued progress in financialsector reform, including improvements to the legislative frameworkfor financial regulation. They also supported the actions takento bring systemically important non-bank financial institutionsinto the regulatory perimeter and looked forward to acomprehensive assessment of Trinidad and Tobago's regime againstmoney laundering and the financing of terrorism.

Directors took note of recurring shortages in the foreign exchangemarket. They encouraged the authorities to allow for sufficientflexibility in the operation of the market to ensure that itclears, especially given the ample foreign reserve position.Directors expressed concerns about the lack of reliable and timelyeconomic statistics, which severely limits the ability to conductsurveillance. They recommended prompt action to provide adequateresources to the statistical office.

Directors emphasized the benefits of further structural reforms toboost competitiveness and lay the foundation for sustainable anddiversified growth. They welcomed recent measures taken to reducebusiness impediments, but noted that action remains necessary inseveral areas. In particular, inefficiencies in the public sectorand distortions in the functioning of labor markets hinder privateinvestment and should be addressed decisively.

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Monday's edition of the TCR-LA delivers a list of indicativeprices for bond issues that reportedly trade well below par.Prices are obtained by TCR-LA editors from a variety of outsidesources during the prior week we think are reliable. Thosesources may not, however, be complete or accurate. The MondayBond Pricing table is compiled on the Friday prior to publication.Prices reported are not intended to reflect actual trades. Pricesfor actual trades are probably different. Our objective is toshare information, not make markets in publicly traded securities.Nothing in the TCR-LA constitutes an offer or solicitation to buyor sell any security of any kind. It is likely that some entityaffiliated with a TCR-LA editor holds some position in theissuers' public debt and equity securities about which we report.

Tuesday's edition of the TCR-LA features a list of companies withinsolvent balance sheets obtained by our editors based on thelatest balance sheets publicly available a day prior topublication. At first glance, this list may look like thedefinitive compilation of stocks that are ideal to sell short.Don't be fooled. Assets, for example, reported at historical costnet of depreciation may understate the true value of a firm'sassets. A company may establish reserves on its balance sheet forliabilities that may never materialize. The prices at whichequity securities trade in public market are determined by morethan a balance sheet solvency test.

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